Technology Roundup – Chinese pet e-commerce platform Boqii drops 19%, Alibaba price targets raised

Published on: October 1, 2020
Author: Amy Liu

Chinese pet e-commerce platform Boqii drops 19% after trading debut, Alibaba price targets raised

Boqii (BQ), Chinese e-commerce platform for pet products, opens its first day of trading even with the $10/ADS pricing.

Shares are now down 18.8% to $8.27.

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The offering included 7M ADSs and raised $70M.

According to Frost & Sullivan, Boqii is the largest pet-focused firm in China by both revenue and number of customers.

Previously: Boqii Holdings prices IPO at $10/ADS (Sep. 30 2020)

Check out the latest IPO news.

Alibaba price targets raised after investor day on growth prospects

Benchmark maintains a Buy rating on Alibaba (NYSE:BABA) and raises the price target from $290 to $355 after the investor event, growing “incrementally more positive” on the long-term growth outlook, citing market opportunities, improved efficiency, and the culture of innovation.

Truist Securities (Buy) lifts BABA’s target from $285 to $308, saying the event suggests “China’s on the other side of the pandemic, with Y/Y growth back to pre-COVID levels.”

The firm sees Alibaba “disproportionately benefiting from this renewed growth with “large opportunities ahead still both inside/outside China.”

During the event, Alibaba said it expects the cloud computing business to become profitable for the first time before the end of this fiscal year.

Alibaba shares are up 2% pre-market to $282.51.

BABA has a Very Bullish average Wall Street analysts rating with a $310.39 price target.

Canadian Solar to raise $260M ahead of China carve-out IPO

Canadian Solar (NASDAQ:CSIQ) says it plans to raise RMB1.78B (~$260M) in capital for CSI Solar, its module and system solutions subsidiary, a key step in qualifying for the planned carve-out IPO in China.

The company says the capital raise will bring in institutional investors and strategic partners including CDH Investment Management and SIP Oriza PE Fund Management.

After closing, Canadian Solar and third-party investors will respectively own 74.9% and 20% of CSI Solar.

The company also names Yan Zhuang as President of CSI Solar, stepping down as President and COO of Canadian Solar.

In a bullish report posted recently on Seeking Alpha, EnerTuition says the upcoming China IPO could remove the stock’s “China discount” in the U.S. market and “make the company significantly more valuable.”

Micron analysts shrug off Huawei-lowered guidance

Cowen analyst Karl Ackerman maintains an Outperform rating on Micron (NASDAQ:MU) and lowers the price target by $3 to $57, saying the weaker outlook was “well-telegraphed,” but the “higher DRAM production costs, front-half loaded capex and lackluster demand will hurt” gross margins and FCF.

Ackerman calls the elevated inventory levels and continuing enterprise weakness “a bit disconcerting.”

RBC’s Mitch Steves (Outperform, PT from $60 to $57) says it was “a solid quarter” with the outlook weighed down by Huawei. Steves thinks 2021 “will be the year where cyclical stocks begin to see improvements.”

Morgan Stanley’s Joseph Moore (Overweight, $63) expects “tough conditions for another couple of quarters, but recovery thereafter.” He says guidance was “well below consensus” but praises management’s execution “under challenging market conditions.”

Moore notes that the capex guidance means FCF will “likely be negative for at least a couple of quarters unless pricing rebounds.”

Micron shares are down 3.9% pre-market.

Google facing Android antitrust probe in China – Reuters

Reuters sources say the antitrust committee of China’s State Council will investigate Google (GOOG,GOOGL) after accusations the tech giant uses its Android OS to stifle competition.

Huawei proposed the probe last year and a decision is expected as soon as next month.

The sources didn’t say what services might be included in the investigation. Most Chinese smartphone makers use an open source version of Android.

The potential probe comes during heightened tensions between the U.S. and China after the U.S. actions (or attempted actions) against Huawei, ByteDance’s TikTok, and Tencent’s WeChat.

Google did have a U.S. license to provide technical support and Mobile Services to new Huawei phones, but that license expired in August.

China is also in the process of revamping its antitrust laws with higher fines and expanded criteria for determining a violation.

Related: No stranger to antitrust fights, this week Google has submitted new concessions for its Fitbit acquisition and awarded mobile search slots to competitors, both actions related to EU antitrust actions.

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